UH Mānoa announces steps to begin spending reductions

University of Hawai‘i at Mānoa is taking action to begin meeting anticipated spending reductions, which in the budget approved by the State House amounts to a $33 million cut in general funds for UH Mānoa, representing a 13% reduction in its general fund budget of $256 million.

In a message today to the UH Mānoa campus, Chancellor Virginia Hinshaw explained the budget reductions will be handled strategically rather than in across-the-board cuts.

"Our goal, of course, is to reduce costs but minimize impact on our programs; however, at this level of reduction, we are facing a significant challenge, particularly with regard to maintaining the number of people we support on general funds," said Chancellor Hinshaw.

The largest reductions ($22 million) will be differentially proposed across Mānoa so that there is the least possible impact on instructional services.

She is also directing UH Mānoa administrators to implement budget cuts of 4 percent. This will save about $11 million and may require non-renewal and termination of a significant number of personnel, particularly lecturers and temporary staff.

"I assure you that no one is undertaking this move lightly or without a great deal of sympathy for its impact on lives, careers, and families," she said.

Although the proposed budget reductions remain preliminary, planning must begin now for the 2009 fall semester. "The campus has to plan for what our proposed reduced budget can support at this time, particularly in view of our need to ensure available classes and personnel for the coming year. Our students are coming and we want to support them in the best way possible so we need to make changes now," said the Chancellor.

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A copy of the Chancellor‘s message to UH Mānoa follows:

April 2, 2009

MEMORANDUM

TO: University of Hawai‘i at Mānoa community

FROM: Chancellor Virginia S. Hinshaw

Aloha! I do want to keep everyone here at UH Mānoa updated on our budget situation, so I am writing to provide the information we have at this point. As we all recognize, the financial situation for Hawaiʻi and the world is still worsening, so that is the reality we face. Legislatively, the news has not been good either in that the budget approved by the State House contains a $33 million cut in general funds to our UH Mānoa campus — this represents a 13% reduction in the general funds provided by the State. There is much yet to happen during the budget process, including actions by the Senate and the Governor, along with the potential impact of the stimulus package; however, reductions of this magnitude require that we take painful steps now to prepare for reduced resources in the next two fiscal years, beginning this July 1st.

Our goal, of course, is to reduce costs but minimize impact on our programs; however, at this level of reduction, we are facing a significant challenge, particularly with regard to maintaining the number of people we support on general funds. If we have fewer people providing services to students, faculty and staff, that will impact in many ways — from offering fewer sections of classes to less administrative support. We have projected reductions, along with new income, potentially to cover 2/3 of this $33 million cut; however, that still leaves $11 million that is not covered.

In order to address that part of the shortfall, we‘re directing UH Mānoa administrators — chancellor, vice chancellors, deans and directors — to plan for and implement cuts of at least 4 percent in their budgets. Because we have limited flexibility with regard to certain personnel categories, this action could well require non-renewal and termination of a significant number of personnel, particularly lecturers and temporary staff. I assure you that no one is undertaking this move lightly or without a great deal of sympathy for its impact on lives, careers, and families.

I wish to emphasize that we are handling these budget reductions as strategically as possible rather than imposing across-the-board cuts. That is why the largest reductions ($22 million) will be differentially proposed across Mānoa. And I‘ve also determined that several programs are exempt from reductions: security, facilities repair and maintenance, and the School of Hawaiian Knowledge (because of our commitment to supporting our newest school, dedicated to our host culture).

We can hope that the budget situation improves enough to reduce the "people impact" of these cuts. However, the campus has to plan for what our proposed reduced budget can support at this time, particularly in view of our need to ensure available classes and personnel for the coming year. Our students are coming and we want to support them in the best way possible so we need to make changes now.

Mahalo to the many of you who have contributed excellent ideas for saving resources, such as reducing administration by combining and streamlining our bureaucracy; reducing energy consumption; going paperless; and many more. Our campus Budget Workgroup is exploring these suggestions and identifying other steps that will achieve required levels of spending reductions in the immediate future. As you are also aware, we have also initiated a longer-term campus-wide prioritization process that is examining all of our programs on the basis of how they fulfill UH Mānoa‘s strategic priorities for the purpose of supporting those priorities with available resources.

If the budget situation improves during the coming weeks, there would be two immediate benefits — we could reduce some of the cuts, particularly in personnel, and also use any available resources to meet priorities identified in our Prioritization Process. I do believe UH Mānoa is taking responsible steps in its planning to best serve the State of Hawaiʻi.

I would also emphasize that UH Mānoa is truly a generator of resources for the State — as indicated in the recent report from the University of Hawaiʻi Economic Research Organization showing that every dollar invested in UH Mānoa generates $5.34 in spending here in Hawaiʻi — few enterprises offer that type of return. Our contributions in providing an educated population, serving the community and generating research advances that create new careers and improve our lives are impressive. I am an optimist by nature, but a realist by experience, so I believe it is important that we are all aware of the seriousness of the situation, yet recognize that we are part of the solution to the economic challenges Hawaiʻi faces. Also, universities are full of smart, creative people, so this is a time to call on everyone‘s thinking to generate our best ideas for the future.

Mahalo for your patience and understanding during this uncertain time, and for your commitment to ensuring that UH Mānoa continues to maintain our standards of excellence. I have also appreciated the useful feedback many of you have provided. If you have additional ideas or input, you can e-mail me at vhinshaw@hawaii.edu